Asia stocks hit by oil tumble, weak China data

ChaoDeng

Falling oil prices and a worse-than-expected slowdown in Chinese manufacturing activity sent stocks sharply lower in Hong Kong and Australia on Monday, while Japan provided a haven for the region’s investors.

Oil extended its fall to below $65 a barrel following a surprise move Thursday by the world’s biggest oil producing nations to maintain their production target levels, meaning a glut in the market is likely to remain. Analysts predict prices could fall as low as $60 a barrel in the near term.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in January
US:CLF5
traded as low as $64.10 a barrel on Monday, down $2.05 from late Friday in New York. They slid 17.9% in November.

The drop had many of the region’s markets deepening losses into the close. Australia’s S&P ASX 200
XJO, +0.31%
benchmark index closed down 2% at 5207.70, as a gauge of its energy stocks fell 6.4%. The Hang Seng Index
HSI, -0.44%
lost 2.6% to 23367.45. An index of Hong Kong-listed China shares slumped 2.9%, marking the biggest one day fall since February.

Still, Qantas Airways, which benefits from lower fuel costs, advanced 4.7% to break above A$2 for the first time in more than three years.

Downbeat figures from China deepened stock losses in Hong Kong. An official gauge of manufacturing activity came in at 50.3 for November, below expectations of a reading of 50.6 and down from 50.8 in October. An unofficial gauge of nationwide manufacturing activity from HSBC fell to a six-month low.

The Shanghai market eased from a five-month rally. The Shanghai Composite
SHCOMP, +0.54%
benchmark closed off 0.1% at 2690.16 after trading up as much as 1.4% during the session. The index rose 7.9% last week as investors focused on the central bank’s surprise move on Nov. 21 to cut interest rates to help lift the economy.

One of the few resilient markets in Asia was Japan. Lower crude oil prices helped boost the U.S. dollar against the Japanese yen, a net positive for the Nikkei Stock Average
NIK, +1.23%
, which rose 0.8% to 17590.10. The U.S. dollar traded as high as 119 yen
USDJPY, +1.16%
its highest level since Aug. 9, 2007.

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